WASHINGTON (Reuters) - The U.S. House of Representatives voted on Thursday to repeal a Labor Department rule aimed at protecting retirement savers from profit-hungry brokers, a largely symbolic move that President Barack Obama has threatened to veto.
Obama’s administration earlier in April released the rule setting a fiduciary standard for financial brokers who sell retirement products, requiring them to put clients’ best interests ahead of their bottom lines.
Republican political leaders and some in the financial industry responded by trying to override it through legislation, saying complying with it would be expensive for brokers which would result in higher costs for retirement advice that many Americans could not afford. They also say that the rule does not take into account other laws and regulations on financial advice.
Thursday’s vote of 234 in favor, and 183 opposed split along party lines. Democrats said the fiduciary rule would protect families from paying higher fees and that the Obama administration took into consideration industry concerns when drafting the rule.
“Bureaucrats in Washington, D.C. have no business getting between you and your financial planner. But that’s what the Obama administration’s fiduciary rule does,” said House Speaker Paul Ryan in a statement after the vote. “It’s Obamacare for financial planning.”
The Senate would have to take up and pass a version of the resolution and then Congress would send a combined bill to Obama to sign into law.
Obama made clear that would not happen in a statement issued on Wednesday saying the final Labor Department rule “reflects extensive feedback from industry, advocates, and members of Congress, and has been streamlined to reduce the compliance burden and ensure continued access to advice.”
The rule has followed a long path to fruition. It was first proposed in 2010 and a year later the Labor Department, which oversees retirement plans, had to rescind it in the face of enormous industry backlash.
Reporting by Lisa Lambert; Editing by Cynthia Osterman